MakeGo is quite an idea. It's an iPhone app, available for $1.99 right now, that turns the touchscreen of an iPhone (or iPod touch) into a vehicle-style toy, where you can play around and generate sounds for toys like a racecar, ice cream truck, or even a riverboat. But the genius of this one isn't what's in the iPhone, it's what's outside of it. The idea is that you build a vehicle case for the iPhone out of whatever you want, be that Legos or wood or just paper, and then your custom-built case, along with the iPhone running the app, becomes a very professional, interactive toy.
Now, there are a few issues here, the first one being that when I played with vehicle toys as a kid, they almost inevitably ended up crashing in horrible ways, so I don't know how comfortable I'd feel giving any child an iPhone 4S to throw around. But lots of kids have access to old iPhones or iPod touches at this point, and this seems like a really ingenious way to inspire creativity and come up with a really great DIY toy. It's also super cheap, given that you already have the iOS device, because touchscreens for toys can send prices up through the roof.
And finally, it's a great example of just how much the iPhone and iPod touch have changed all sorts of industries. When powerful, touchscreen-based devices are this prevalent and this ubiquitous, why not use them to inspire some really interesting imagination play?